Canada’s Charities Deserve Better

I recently re-read an article I saw years ago by Brad Offman, Managing Partner at Spire Philanthropy in Ontario, that I thought was worthwhile sharing; so I reached out to Brad and asked him if it would be okay if I shared this information in my monthly Blog. Thanks Brad for agreeing to this.

Brad went on to say on February 25, 2014 that it’s time to have a frank discussion about charities and their administrative and fundraising costs. Over the past decade, the increasing focus on a charity’s cost of doing business has forced the entire charitable sector to defend itself against a rash of naïve accusations.

While there is no doubt that a few bad apples have found their way into the sector, the fact remains that over 85,000 charities are doing precisely the work that most of us admire: feeding the needy, housing the homeless, nursing the sick and educating the young. Why some choose to focus their energy on the rotten apples rather than the orchard of vibrant ones is, sadly, a product of our negative media culture.

Our charitable sector is perhaps our great country’s most valuable resource. It places human decency and kindness above all else. It is not surprising then that the charitable sector has reacted to the recent focus on its cost structure with politeness, diplomacy and tact. The sector has (correctly) pointed out that evaluating a charity’s fundraising cost ratio might very well reflect its fundraising efficiency, but may have little correlation to a charity’s ability to achieve its mission (that is, its impact on societal betterment). The problem is that measuring a charity’s impact is difficult and subjective, while measuring fundraising efficiency is relatively simple. In the final analysis, however, impact is really the only thing that truly matters.

Brad at that time worked for an investment management company. He explained that when portfolio managers analyze companies, they look at a variety of factors before they decide to invest. First, they crunch the numbers from absolutely every angle. Second, they look at other less tangible factors – the company’s management team, its products and services, etc. Third, they look at the company’s secular context – its competitors, the industry in which it operates and even broader local and global economic inputs. In other words, their analysis is not just a simple numerical one but one that incorporates broader judgment.

Those that work closely with the charitable sector know that it doesn’t stand on a soapbox and shout about the wonderful work it does. It just isn’t the type. Instead, it does its job proudly and quietly, like your trusted colleague who always gets the job done quickly and properly with no fanfare. Perhaps charities need to respond more vociferously to those who diminish their importance by focusing primarily on administration and fundraising costs. Until then, they will be forced to defend themselves from those who devalue the importance of the entire sector.

If you would like to learn more about how my experience and skills may be able to help benefit your nonprofit, or a nonprofit you may be associated with, please do not hesitate to get in touch with me as I would be pleased to meet and discuss the opportunity of working together.

I hope you enjoy my postings and find this information useful. Please follow the link at: http://raveresults.ca/blog/ as I welcome your comments on my Blog.